Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315955 
Year of Publication: 
2025
Series/Report no.: 
Staff Reports No. 1145
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
What is the essence of non-bank financial intermediation? How does it emerge and interact with intermediation performed by banks? To investigate these questions, we develop a model-based survey: we classify existing models into different intermediation functions á la Merton (1995) to show that variations of them admit a common modeling structure; then, we extend or reinterpret the resulting models to connect equilibrium strategies to non-bank activities in practice. Particular emphasis is placed on the coexistence of banks and non-banks: how their competition, or the extent of cooperation through contractual arrangements, varies across intermediation functions. Through this approach we speak to a variety of entities such as traditional banks, open-end funds, special purpose vehicles, private credit entities, and fintech lenders. We also discuss innovation, regulation, and market liquidity as drivers of non-bank activities.
Subjects: 
non-banks
banks
financial intermediation
JEL: 
G21
G23
G18
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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